Problem 9-22 Critique a Report; Prepare a Performance Report (LO9-1, LO9-2, LO9-3, L09-4, L09-6] TipTop Flight School offers flying lessons at a small municipal airport. The school's owner and manager has been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget 145 140 Variances Lessons $ 36,030 $ 35,000 $1,030 P Revenue Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 7.835 7,700 5,365 5,180 3,430 2,800 3,135 3,000 2,145 2,220 3,625 3,220 25,535 24.620 $ 10,495 $ 10,380 $ 135 U 185 U 630 U 135 U 75 7 95 915 U 115 After several months of using such variance reports, the owner has become frustrated. For example, she is quite confident that instructor wages were very tightly controlled in July, but the report shows an unfavorable variance. The planning budget was developed using the following formulas, where is the number of lessons sold: Revenue Instructor wages Aircraft depreciation Puel Maintenance Ground facility expenses Administration Cost Formulas $250g $559 $379 $209 $620 + $179 $1,800 + $39 $3,440 + $29 Homework Saved Aircraft depreciation Puel Maintenance Ground facility expenses Administration $379 $200 $620 + $179 $1,800 + $59 $3,440 + $29 Required: 2. Complete the flexible budget performance report for the school for July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Tip Top Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Results 145 Flexible Budget Planning Budget 140 Lessons $ 36,030 $ 35,000 7,700 Revenue Exponses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration $ 7.835 5,365 3,430 3,135 2,145 3,625 25,535 $ 10,495 5,180 2,800 3,000 2.220 Total expense Net operating income 3,720 24,620 $ 10,380